What started off as a simple, if very much illegal, information gathering protocol (and yes, NOTW is most certainly not the only organization that hacked voice mails), and has since escalated to an epic shakedown of one of the world’s most legendary media companies in which Murdoch himself now appears on the verge of leaving the company, appears set to ultimately result in a historic parliamentary collapse, with the Prime Minister of the UK David Cameron seen as the ultimate fallguy.

As English booking agency reports, “David Cameron’s odds of leaving the Cabinet have been slashed by Ladbrokes. The bookies have taken a steady stream of bets on the PM leaving office with the odds dropping from 100/1 to 20/1 and now 8/1 in a matter of hours.” In other words anyone who bet that the shuttering of the NOTW was merely the first step in the News Corp. scandal and that it would reach as high as the pinnacle of UK leadership, has made a return well over 10 times in the past several days. And yet, as the Economist chimes in with a late night piece, the departure of Cameron at this point is far from certain. Which is arguably a far worse state of affairs: if there is anything the markets hate, it is uncertainty. If Cameron was sure to stay or go, it would have no impact on the UK’s economy and financial markets. As it stands, and with Murdochgate getting worse by the minute, we would not be surprised to see UK CDS follow the US and Germany to multi-year highs, as the UK now openly becomes yet another target for the bond vigilantes who relish precisely this kind of uncertain inbetweenness.

It is wrong to argue, as do some Labour MPs, some bloggers and tonight’s edition of BBC Newsnight, that David Cameron logically might have to resign as prime minister, now that Britain’s most senior police officer, Sir Paul Stephenson, has had to quit.
The argument rests on a superficially neat piece of symmetry. Sir Paul, until this weekend Commissioner of the Metropolitan police, had to resign after it emerged that his force had employed the former deputy editor of the News of the World, Neil Wallis, as a PR consultant. In contrast, Mr Cameron hired Mr Wallis’s boss, the ex-NotW editor Andy Coulson as his PR chief, and yet he is still in his job as prime minister. “Spot the Difference”, grumbled the Newsnight political editor Michael Crick, who had earlier asked the Tory mayor of London, Boris Johnson, to explain the same contrast at a press conference this afternoon, reducing the normally loquacious Mr Johnson to stammering and flannelling.
Ex-commissioner Stephenson clearly sees things the same way, aiming a clear barb at Downing Street in his resignation statement, when he noted that his ex-tabloid helper had never had to resign, unlike the prime minister’s ex-tabloid helper, Mr Coulson (who stood down as editor of the NoTW in 2007 after the jailing of his royal correspondent and a private investigator over phone-hacking, even though he said he knew nothing about it).
But the problem was not so much that Neil Wallis was given a two day a month contract at Scotland Yard between 2009 and 2010, advising senior officers on PR strategy. The problem is that more recently, even after the police came under huge pressure for their astonishingly lackadaisical approach to the phone-hacking scandal at the NotW, senior officers did not think it appropriate to tell anyone in government, let alone the public, that they had been paying a former deputy editor of the same paper for strategic press advice.
This though that advice was being given at the very same time, in 2009, when Scotland Yard was deciding not to reopen the hacking investigation, and was poo-pooing the excellent reporting of the scandal by papers like the Guardian. In the end, the police only alerted the government last week, on the day that Mr Wallis was arrested on suspicion of involvement in phone hacking, as part of the current police probe, known as Operation Weeting.
If it had only just emerged that David Cameron had been secretly taking paid advice from Andy Coulson, the prime minister would also be in astonishing trouble right now. As it is, Mr Coulson’s appointment (which was a colossal mistake, as I have said many times) was a matter of public record. That makes a very big difference.

One way or another, this unprecedented public scandal will provide sufficient cover to what is really happening behind the scenes: the status quo’s very battle for survival with the (solvent… albeit temporarily) fates of both the Eurozone and the US resting in the balance as of this posting.